sxz time for a quick e-mail, what do you have? >> all i saw was barnacle in the corner, acting weird. >> they have renamed the room the mike barnicle room. "morning joe" starts right now. >> nobody believes that the boehner problem is anything more than a big, wet kiss to the

right wing. i mean the tea party. that's what i mean. it's too bad the caucus is run by so little people. >> when i asked the plan, the aids pointed to a speech. congress can't vote on a speech. a veto threat won't prevent default. >> we are urging the republicans to step back, put their party caucuses aside, put their pledges to grover norquist aside and put this country first. >> it's unfair from the president of the united states to lead from behind. it's unfair for the president of the united states not to come forward with a specific plan that, perhaps to be considered by both bodies, but only to go out and give lectures. >> we are not going to hold this country hostage to the tea party. those folks over there, about 80

of them, they pledged to grover norquist. i want to pledge allegiance to the united states of america. that's what we should be doing. >> good morning. it is thursday, july 28th. look at the beautiful shot of new york city. welcome to "morning joe." yes, with us on set -- >> look at him. >> msnbc contributor, mike barnicle. >> national affairs editor, john heilemann and willie geist. the excitement of yesterday's anniversary. >> where were you? >> at a satellite in boston. >> a lot of talk about john mccain the last couple years. yesterday, john mccain, classic john mccain, he went after the president for leading from behind, which is new york times talks about today.

>> right. >> nobody on the left can say that's a right wing attack by john mccain. he tore into the republican freshmen as well. i mean mccain went after both sides and yesterday, basically said let's get the grown ups in the room and save the economy from a collapse. >> welcome back, senator mccain. this is the senator mccain who we used to know several years ago when he attempted to speak the truth to both parties. an independent guy, a maverick. he reminded me of something that's been missing in this debate. there's no political parties. there's no discipline. it's shocking. i know it's especially shocking for the white house. what did john mccain call the tea party guys? >> two very good quotes yesterday. the first was -- >> if you write for new york magazine. go ahead.

>> i believe you like these, don't you? it's why we are talking about it. >> i like the fact he went after both sides. >> the house believing president obama and the democrats would get the blame for default if the republicans refuse to raise the debt ceiling. democrats would have no choice to pass a balanced budget and the tea party hobbits can return to middle earth. this is the political thinking that turns them into gop nominees. >> i love it. >> the fact is, what really set him off yesterday was is fact that there are some people, some freshmen republicans that aren't telling the truth in the balanced budget amendment. oh, if they would only let us vote on this. no it wouldn't. i would love for it to pass. i would love $4 trillion in cuts.

it's not going to happen. so, there eesz john mccain who's been around since 1982 or 1980 and he's being lectured by freshmen telling him certain things are going to happen that he knows won't happen. yesterday -- >> i can see him not taking too kindly to that. >> yesterday, he exploded on both sides. >> maybe people who have only been here six or seven months that don't know better. if you have been around longer, you know better. >> he knows because in 1995, when we were at our zenith, when we owned the house and the senate, we still couldn't pass a balanced budget amendment. we lost by one vote. we still couldn't pass it. nobody that knows anything about politics believes they can pass it. i respect them. i support a balanced budget

amendment. i support christmas eve every day. i support the red sox and crimson tide and atlanta hawks winning every year. it ain't gonna happen. it will never happen. >> the clock is ticking. >> the clock is ticking. >> let's have votes on the things that aren't going to pass. we don't have all the time in the world. >> let's listen to john mccain as he channels froto. he's not really froto here. mccain and long flowing air. >> some members are believing that we can pass a balanced budget amendment to the constitution in this body with the present representation and that is foolish. that is worse than foolish. that is deceiving. many of our constituents, by telling them that just because the majority leader tabled the

balanced budget amendment legislation that somehow through amending and debate, we could somehow convince the majority on the other side of the aisle to go along with a balanced budget amendment. that is not fair. that is not fair to the american people to hold out and say we won't agree to raising the debt limit until we pass a balanced budget amendment to the constitution. it's unfair. it's bizarre. maybe some people who have only been in this body for six or seven months or so really believe that. >> all right. the house is expected to vote today on speaker john boehner's plan to raise the debt ceiling. it's after he released an amended version of the bill requested by the congressional budget office. now the cbo says it will cut

deficit by $917 billion over ten years, it's $66 billion over the original. it's expected to save $22 billion. they reviewed harry reid's proposal. the main difference is the reid plan extends the debt ceiling for a longer period of time. boehner responded to the news saying, quote, this report shows the senate plan for what it is. a grab bag of gimmicks that gives the president a blank check. many house republicans are hesitant to back the speaker's bill. boehner confirmed he had tough words for his party during a closed door meeting. >> is it true you told some of the republican members this morning that you need to get your a wort in line behind this debt bill? >> i sure did. this is time to do what is doable. this bill isn't perfect.

i told the members that the last couple days. that's what happens when you have a democrat controlled senate and a democrat in the white house. >> what is the a-word? >> stop it. meanwhile -- be quiet. be quiet. >> call your partner and ask him. >> what's happening with you? >> i told you. >> get your apple jacks in line. get your ass in line. >> i didn't say it. >> is that offensive to you? >> nothing is offensive to me. >> come on. come on. >> you know, there's no value. there was no value in digressing. no, none. some of us want to read the news. others like putting their own opinions in the news. boehner, john heilemann, really took it to the republican freshmen in a closed-door

meeting. they said it was the toughest meeting they have had. boehner said, listen, it's simple. you can strengthen barack obama's hand or my hand. if you don't give me this, you have helped reelect the president. do what you want to do. eric cantor was up there fighting the fight. at least the leadership is on the same page. >> it's nice after all these months for cantor to be on the same page as boehner. it's helpful. any illusion there's anything called party discipline on the republican side has been totally destroyed. john boehner looked at his caucus. it's become a zoo. he had to do something a lot of people wished he would have done long ago. >> what's amazing is there is no fear left in the presidency in terms of legislation. in terms of moving things in the house or the senate. there seems to be in fear of the

president. >> absolutely not. "the new york times" article, we are about to read it, they said the president is quote, invisible. you talk to democrats and we talked to a lot of democrats on the hill and they say he is invisible. they say he is not leaving. he is leaving them out there alone. white house don't get mad at me, get mad at the democratic caucus. the president is invisible in one of the most critical moments of his presidency. >> president obama has been seemingly been relegated to the sidelines in the debate. the article notes deploying the heavy weapons including a national address on monday night, mr. obama is in danger of seeming a spectator at a krit tall moment of his presidency. unable to get the bargain he wanted, he needs to reassert

himself for the next best hopes.e or one that does no harm no measure can pass without the president's signature. he's far from irrelevant. the about to affect the legislation and inability before now to shape a compromise with house republicans, many of them dedicated to never compromising with him is proving the most significant test to date to bridge the two parties and make washington work. >> joe, let me put this to you. say you are harry reid. what do you want from the president of the united states? he's pointed out, he looks like a guy who used every arrow in his quiver. forget what he hasn't done, what can he do now? >> in every single negotiation, you have both sides taking a position. if your opponent takes an

unreasonable position, if you believe the tea party only represents 20% of americans thinking as the white house believes and the democrats believe, then you stand-up. you have to stand-up and be counted and say you are going to blink first. the past is prolonged. we talked about this with the stimulus package. democrats are saying this. again, the democrats on the hill are all saying this. he had us write the stimulus package with little guidance. we did health care with little guidance. the three challenges of his presidency were done in the house and senate. as a former guy that worked in that legislative branch, you do not want them shaping big legislation. you need leadership from the white house. there's 535 people going in 535

different directions. >> wall street and the effects on it, the deficit blame game isn't playing well. detailing the dow's fourth straight session in the red. the worst one day drop in two months. the the ratings agency thinks the u.s. will default on the debt is unlikely. deven sharma says it depends on a credibility long-term plan. >> we are in trouble regardless. >> anybody you ask. let me throw something to the table. i got all these tweets and e-mails yesterday. >> yes. >> call me when it's over. call men when we have raised the debt ceiling and when it's over. john boehner reshaped the plan and they are going to vote on it today. say it passes. the senate says it's dead on

arrival. it's not going to make it through the senate. how do we get to the point where the conversation is over? we have two parallel plans that are not able to meet in any way. the president will veto any plan out of the house. how do we get to a resolution? >> there's a premise in that question. the boehner plan and the reid plan are not that different. they are different primarily only in the sense the boehner plan forces a debt ceiling next year. the size of the cuts are not that different. they are not that far apart. the reid plan i think will pass the senate. the boehner plan will pass the house. the reid plan will not pass in the house and boehner not in the senate. they are not that far apart. there's a basis for compromise. politics are tricky. on the substance of their bills, they could get together. i think it's the best way for it. by the end of yesterday, it's more likely we'll get something

built around the two bills pushed together that i thought the day before when i thought we might get nothing. >> mike, are we being too tough on the president? >> i don't think so. a lot of people are disappointed in the president on a number of different levels. internally, on the baseball level, why hasn't the president done more in the house and senate. why not more internal leadership in pressure and elected politicians. externally, why did he not months ago plant the flag on tax reform and run against the republicans on closing loopholes? >> i would certainly do that moving forward. >> why didn't we do it months ago. it would have expedited this process. >> you don't think he -- >> do you think we are unfair? >> i think it's very possible we might be. it's very easy because he's the

president. come on. the tea party and a lot of the republican leaders, come on, they are being so difficult. >> that is part of -- why not months ago explain to the american electorate that when you cast your vote for a legislature, ideally, you are casting a vote for someone who is going to go down thinking independently, vote according toly. signing a pledge before you get there? >> yeah. call them out. >> the tea party members and the freshmen republicans have been the most rational thinkers in this process. >> really? >> if you look for results. politically. lyndon johnson surveying the battlefield would say the only people that know a damn about leverage are the crazy republicans because they know they are going up against

somebody who will back down. i can tell you again, as a lawyer, if you know the other side always if you knew the other side was afraid to go to court and try the case, you get them in mediation and say okay. lowball them and say okay. we are just going to walk out. no. that guy was not going to go in the courtroom. he was terrible in the courtroom and his clients would suffer because of it. it's the same thing here. >> there's no question that the president has weakened himself over time by compromising and compromising. the republicans have gained an enormous amount. the question is, this is where you get to the craziness of the house republicans. you know when to take your victory and go home. this is against their irrationality. there's only so much the

president can do. they use leverage the way you are talking about, and are literally over the brink. >> i know this. i know bill clinton broke our backs and we were right wing and -- i was there. >> you would have never done this. >> we would have waited until the day before and taken the best deal. >> i don't know if this freshman class will do that. >> what president clinton liked to do that president obama does not like to do is confront people and fight. >> yeah. he took us to the wall and crushed us. he crushed the republican revolution of 1995. so, anyway, mika -- >> they get everything they want

and we have a society bubbling over. in a few years it will be all theirs. >> the good news is after this is settled we might have this debate in september over shutting down the government. we could have a whole nother government shutdown. >> i think we're going to have a deal. >> we bring both sides today. mark warner, president of americans for tax reform grover norquist, david walker along with lawrence o'donnell. this is going to be fun. first, bill karins has a check on the forecast. >> good morning, mika. good morning everyone. a tropical storm formed over night. tropical storm don is in the gulf of mexico. it usually gets our attention. this storm is going to stay on the weaker side.

looks doubtful it will become a hurricane. it should move to texas late friday night and saturday morning. this will bring beneficial rain to the area. as far as the forecast today, the heat is not too bad. humidity levels are increasing. watch for the rain around buffalo. there's a lot of heavy rain and flash flooding from flint michigan to detroit. chicago is going to be trouble if you are flying in and out of o'hare. you're watching "morning joe" brewed by starbucks. every day, all around the world,

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♪ >> the republicans and the democrats, i mean this is going right to the wire and they are not getting along. things have never been worse.

forget about reaching across the aisle to work together. forget about bipartisan politics. it's not happening. did you see "morning joe" this morning on msnbc? take a look at this. >> republicans and democrats get in a room and work this out. >> you recall newt gingrich gave a speech in 1997, made a deal -- "morning joe" will return in a moment. >> oh. i didn't see that happening behind steny. i was hanging on his every word. i must have missed it. let's take a look at the morning papers. "the new york times," walter reid medical hospital that's treated hundreds of thousands of war wounded. it's set to close next month more than a century after it

opened. they will move to maryland to a new facility in virginia. new job approval numbers for new york city mayor bloomberg. numbers are going up now to 45%. it comes after a tough start for the year that included a failed school chancellor. whatever. >> miami herald, rick sanchez. >> whoa. >> making a comeback. >> wait a minute. >> a year after he was let go at cnn, he has new gig for florida international university college football. that's a great gig. >> fun. >> he has two kids currently enrolled at the university. let's be honest. we showed this newspaper to show the rick sanchez taser video. take it away, rick.

oh! some things never get old, mika. >> yeah. i need one of those. >> a taser? >> i do. >> that would be great for you on this set, right? you can taze mike barnicle. >> joe, you need it sometimes. blah, blah. i have other news stories to report now. >> tasers, baby. >> oh, god. what? >> sorry, mika. i will pound heilman for you. >> al qaeda leader releasing a new message in a seven minute

monologue posted to websites. the new number one tells protesters in syria they are part of a broader muslim land. the leader who protects american and israeli interests is believed to be the first public message since named al qaeda's new leader after u.s. forces killed osama bin laden in may. it comes as former president george w. bush speaks out about bin laden's death for the first time. president bush said quote, i department feel a great sense of happiness of jubilation. i felt a sense of closure and i felt a sense of gratitude. all right. that's a look at news and the headlines. time for what is coming up next. >> next, we are getting ready for college football season.

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♪ welcome back to "morning joe." the new college football season is nearly upon us. >> it's big. i understand the commodores have at least ten national merit scholars. >> laugh it up. laugh it up, joe. the college game day crew is gearing up as well. two members of the team, erin andrews and kirk herbstreit. >> this is earlier than we wake up. >> we're trying our best here. >> mika wanted me to ask you guys, how are the williams east in division three? >> down, actually. really good graphics. >> amherst. >> this is really good. two years ago you went there.

>> isn't it beautiful? the purple valley. >> i understand you actually won the nashville? >> i live in nashville. we did a thursday night football game. you did saturday. >> big college. >> come on. >> very cute. >> let me tell you something, the feel on a saturday night, you better buckle up. >> their quarterback, though. you better watch out. a >> you laugh. you laugh. >> we'll take it. if we must, we'll talk about joe's school, alabama. how do they look this year? are they going to be back? >> they have five straight national champions. if you look at all the teams on paper, alabama is probably going to be the leading candidate to

be the sixth straight team. they have to replace the quarterback. they have to start from scratch there. everything else is in place. >> can you believe how good this team was last year and how many losses they had. to be blunt, i think there's bad coaching. >> are you kidding? you have one of the best coaches in america. >> i know. when you are passing the ball left and right. >> you got alabama. how is oklahoma looking? >> amazing. >> best team in the country. without a doubt. one of the best receivers in the country. might be the best team they have ever had. >> let me say something about ohio state. i grew up loathing ohio state. i really feel bad for the program. the coach, i thought was a real class act. >> he is. >> i think he is a class act.

what happens to ohio state moving forward? >> i think ohio state is in unchartered waters for them. the fact they are dealing with the ncaa is new for them. i'd be surprised if they don't have a great year. luke takes over. the thing with ohio state, like alabama, they are better than ten or 11 of the teams they play physically. they don't lose the game. they are going to beat everybody they play. i think ohio state can have a great year. where they go next year is the question. if luke wins nine or ten, do they hire him long term or go out and bring in a big name? >> erin -- >> yes, sir. he's our colleague now. >> you never now how the coaches are going to translate. some of them, you wish they would stay on the sideline. >> he did great on espn. >> how did the gators do? >> florida gators.

>> he left. then you are on national television and say horrible coaching. >> i didn't say horrible coaching. the name was coordinator. >> of course. but that's another story. >> i think they are a huge question mark. first year coach coming on the scene. are you okay? >> yeah. >> alabama-florida. i thought they mistakenly put up the gators playing ou. we'll talk about that. >> charlie white is coming in. >> how about they bring in charlie as the offensive coordinator. they decide to bring in a big personality. they have -- it's going to take a couple years.

fcc east is wide open. anybody could win. >> one year after bobby leaves, they are in the hunt. >> they are in the hunt again this year. >> their quarterback went to the nfl, first round to the vikings. manual played some. if florida state can win that at home, it says we are back. they are putting a lot into the game. >> fisher, really good friends, share a summer home together. i can't remember the last time florida-florida state had a rivalry. or been good friends. >> another twist to that game is mark stoops, defensive coordinator and his brother bob is head coach at oklahoma.

they will go toe-to-toe with that one. >> it's become such a phenomena. the kids are out until 4:00 in the morning. they sleep out. >> i would want to go out. i don't mean to date you guys, but that was one of the cool things for me at university of florida, i used to camp out. just screaming. they are fantastic. come on, guys. it was awesome. last year, graduated last year. '96 to 2000. >> good years. to see where it was 16 years ago to now. >> favorite place to visit. do you have one or two schools you always have fun at? >> austin a blast.

baton rouge is a great time. >> great food. >> i would say eugene, oregon. >> really? >> yeah. we go on the air live there at 6:00 in the morning. 16,000 people around our set. >> speaking of the pac ten, we are remiss if we didn't talk about teens waking up doing drinking games. >> phillips. it's one of the games for this show. >> every time i say when i was in congress you have to take a drink. every time i say 1994 you have to take a drink. when i say, if i were still in congress, you have to take a drink. >> a lot of kids get blacked out. the pac-10, what's going on out there? >> pac-12. >> we were with their commissioners and coaches. i think the conference doesn't get the recognition they deserve. >> great story line with the

quarterback from stanford. could have been the first take to go back to school. >> this is it. he's going to walk away and be done. >> another big program in trouble. usc. what happens with usc? [ inaudible ] >> he's crazy, isn't he? >> he's mellowed out, to be honest with you. you are crazy. >> i say this on the air. >> 1994. >> take a drink. >> he's crazy. >> from game day crew. >> i think the media hypes up guys in our world like people think he's a tyrant, a mean animal. >> what is he really like. >> he's in his office.

>> he bullies the media. >> very smart. >> he's a teddy bear. >> out of control, spoiled kid. he's really actually nothing like that. >> he has mellowed. >> boise state. any way they find their way to a national championship game? >> i don't know if they will find their way to a national championship, but every year they have a shot at the bowl game. it's like getting into the national championship. >> are we moving closer to a playoff? the fans want it. why not? is it about money? >> yeah. the governing body. bcs is controlled by the conference. march madness is controlled. they don't want the ncaa to come in and take the money. they are in control and they want to stay in control. >> are we going to have notre dame this year? you talk about one of the

worst -- i mean horrible. >> is the next segment when you break down the debt? >> i wanted to tell you, the new thing about boise, you cannot wear the blue uniforms on the trip. it's like an advantage. you blend in with the field. >> really quickly, notre dame, how is it going to be this year? >> better. >> texas, are they going to bounce back? >> tcu? >> great year. >> isn't that something? >> great program. >> how far away now? >> a bowl game this year. >> three coaches in three years, though. >> i'm trying to figure out what happened to the last one.

>> it was three days before. >> what do you like? i can't figure it out? >> i love america. i will never apologize for that. >> thanks for coming in. up next, the must read opinion pages.

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♪ okay, time for must read opinion pages. we might want to start today. you are running out of time. >> i am? >> yeah. >> what does that mean? you are running out of time. that is one of the coldest

things i have heard in my life. >> i'm just saying you are running out of time. >> do you watch college football in the northeast? >> no. >> i love dartmouth. >> you ever watch the giant stadium? i'm going to watch columbia play this year. i have heard it's a lot of fun and i have always wanted to go to a game. >> come to a williams-emret game. we can root them on. it will be fun. >> what have you screwed up today? >> no, i'm forced to read this one. >> no you're not. who is forcing you? >> you. >> don't read it.

>> alex has a sweet, outer -- >> i don't want you to read it. they are screaming in my ear. >> you picked it. >> i didn't. >> don't read it then. don't read it. >> no, i'll read it. read another one. >> obama's path from poetry to dredgery. you got stuck with a mess, your unjust reality. your campaign had all the romance of history in the making. your presidency has the dredgery of a toxic clean up. if the country winds up in default and even if it doesn't, it's hard to see how this mess doesn't taint you. there will be questions about whether you put your marker down at the right time. you have health care reform then you have heart ache. >> i think that's sympathetic. i don't think it's negative. >> it's depressing. it doesn't have to be negative. >> the reality is depressing.

>> i don't think it's completely fair to hang it all on him, which you all have been doing the last couple days. >> what are you talking about? >> you haven't been here. you have. >> have you read my tweets? they say i hate republicans. you can't handle the truth. it's not a moral equivalency. it's reality. one party didn't get us here. >> really? >> you think it's all the republican party's fault? >> the tea party is a little much. i have questions for grover norquist. >> i don't know if i can sit through that section. you cannot blame him for the yankees losing the american series in 2004. seriously. you can't blame the tea party for everything.

you've got 87 freshmen going up against the president of the united states. i have words against the president of the united states when he knows how to wield his power and i can tell you there is no competition. somebody that knows how to use the bully pulpit can crush anybody that gets in their way. >> i agree with you. the one thing i don't understand about the tea party, some of their views are widely held by people. i don't understand signing a pledge. you run for office. i want to run for office. i want to give you my independence and best judgment. a pledge. >> a legitimate voice in our country but so do the poor and unemployed and a lot of other people. i feel they have been given too much emphasis in this debate. >> who has given them the emphasis? the president who has not stood up to them.

it's easy. if the president says i will veto any short term extension of the debt ceiling, try me, i will veto it. guess what? their power shrinks immediately. then let's see him do it. >> in a few minutes, lawrence o'donnell here. alex trebek on crutches. the news you can't use is next. be kind to your eyes with transitions lenses. transitions adapt to changing light so you see your whole day comfortably and conveniently while protecting your eyes from the sun. ask your eyecare professional which transitions lenses are right for you. ask your eyecare professional for your transitions

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please tell me it's time. we need a break. >> yeah. did you hear about trebek? the 71-year-old host of "jeopardy." the headline here is, well, i'll let you hear the headline. he found himself in trouble. he wakes up in his hotel room to find an intruder in his hotel room. he was there to host the national geographic bee at google headquarters. let's let him explain what happened next. >> i woke up and saw a figure in our hotel bedroom and a moment later, i got up and saw that the

door was being held open by a wad of tissue. i opened the door and looked out and saw a woman walking away. i put on my underwear and ran down the hall and said what were you doing in our room? she said she wasn't up there. i said what are you doing up there? she said visiting a friend. i didn't get more than 25 feet before my right achilles tendon ruptured and i crashed to the ground. >> he shredded his achilles t tend tendon. >> i will take for 1,000 celebrity -- >> that was my headline. alex trebek. >> willie! >> you didn't have to tell us that. >> sorry. >> it was not your maid.

>> anyway, fought the lady. >> i'm uncomfortable. lawrence o'donnell, next. a yea. that's about 34 million pounds of mail every day. ever wonder what this costs you as a taxpayer? millions? tens of millions? hundreds of millions? not a single cent. the united states postal service doesn't run on your tax dollars. it's funded solely by stamps and postage. brought to you by the men and women of the american postal workers union. ♪

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trying the exelon patch. visit exelonpatch.com to learn more. ♪ >> what's good for this country, what's good for this economy is to stop the spending that barack obama's programs are requiring and to stop wrecking this economy. that's why the members puts a check on obama. >> somebody asked me, is this

thing going to pass. i don't know. but i tell you this, in my life and i hope nobody out here listening has had this situation, i had kidney stones and they are easier to pass. excuse me, i have a pain in my side. >> mike barnicle and john heilemann with us on the set. this is wonderful. we have the host of msnbcs "the last word" lawrence o'donnell. this is tailor made for lawrence o'donnell. this fits him like a finely tailored suit. >> wait a minute. i would like to introduce, i know we are impressed with lawrence and everything, but we have the host of "andrea

mitchell reports," andrea mitchell. >> this is an embarrassment. night of 1,000 stars. good morning. lawrence. friday or monday and you are asking tough questions from both sides. we are trying to figure out the day people are saying the president is invisible. john boehner is telling the republican caucus, quote, get your ass in line. what is going on? >> we are at the stump stage. nothing serious is going on. when ever they are not talking to each other and bringing up bills to pass they know can't pass the body they are bringing it up in. what they are doing is proving what is impossible. now, normally, in a normal circumstance, the way to prove it's impossible, get the caucus together, say we don't have the votes for this. you look around. they are right.

i'm not going to vote for it. now, with the tea party and the people mccain is talking about that have been here for a few months and don't know what they are doing, they don't know what is possible. they have no idea what is possible. boehner is proving to them, hey, what you want is impossible. he's gone through a series of proofs to them that it's impossible. this is the latest proof. it's as good a day for boehner if this passes or doesn't pass. it's the same outcome for him. all he's doing is saying you have to understand, it's impossible. there is no better idea. we are not going to get this. harry reid is doing the same thing. >> they pass what they pass in the house, cut caps and balance, send it to the senate. the senate sits on it. john boehner says i told you. >> yeah. cut cap and balance, that's what you used to have to do.

cut cap and balance was proving it's impossible and cover. hey, i'm going to let you vote on this thing. next week, you have to vote on something you really don't like. you voted for this insane thing that you really love. your insanity was written into this document here, you voted for it, you can have it fomreve. >> at the end of the day, you have been around so many of these things. it happens, right? >> at the end of the day, it's what happens at the end of every single one of these days, as we click down, o'donnellville, andrea saw this yesterday on her show. the one-page bill. this is what it takes to raise the debt ceiling. as you know, joe, it is section 31 of title -- you change one number here.

this is how they did it during the bush years. one page. that's it. they know how to do it. he's talking obama vetoes. he should veto anything sent to him. this is normally the single fastest legislative process that ever happens on capitol hill. they can pass it in the house in ten minutes and the house in five minutes. >> the president will sign anything on his desk. >> i don't know. he has made sure, he had made absolutely sure there is no deal. him adding 50% more taxation to a thing that was theoretically agreed to with boehner is a way of saying i'm not going to do this. >> you think he killed it on purpose? >> are you kidding me? there's a forbidden zone for

republicans, taxation. they have a shape of agreement that includes a very large concession by republicans including cantor on taxation. they leave the room and the next thing that happens, the president calls up the speaker of the house and leaves what are we told, a voice mail message. leaves a message saying hey, could you do 50% more in taxation? what is that? he was trying to kill the bill. >> you think he was trying to kill it? this is when the president went through $800 billion to $1.2 trillion. >> the position was this. give me one of these. this is a silent caucus. there's a silent caucus in the house and senate who want this. it's going well. >> andrea mitchell, get us up to date on reporting. where do we stand this morning

after john boehner going after the caucus yesterday and democrats complaining on the hill? >> some not so quietly. as lawrence was saying, john boehner had a good day yesterday. he put it to his own caucus. we have been talking for awhile about he has a different kind of leadership. he was the first speaker going back to newt gingrich who let freedom reign up there on the hill in the caucus. that wasn't putting the wood to them and laying the law down yesterday. it was saying my way or the highway saying you are hurting me and helping the president. he may get the votes today. finally, when it's said and done, he may pull this together. the fact is, he's going to pull some of them in. it might be better for this to win. it would make him look weak.

baeker than to not win this one vote. it's a sham. it's going nowhere on the senate side. eventually, they are going to get something, a combination of what they are talking about behind the scenes. a combination of reid and boehner. the final last minute deal will probably be closer to what lawrence has there, the one-word change or one page deal. >> a short term deal? is that what we are talking about? >> they can be written with a date or short term or a large enough number to go enough years. everything you are seeing happening now can only happen now. if boehner tried to bring up this bill two weeks ago, he would have been driven out. all everyone is doing, the president is handling this

exactly right. boehner is handling it right. reid is handling it right. it's a dance that proceeds on a schedule in a certain way. it's filled with falsehood through most of the process. we are not going to get real until monday. they will pretend they are for things they are not for. >> one part of the analysis that i have questioned and i think is wrong. >> you have what? >> what? whoa! >> sorry. >> hello. >> the president wanted it all along. they have been terrified throughout as they are terrified of the downgrade. the white house has their eye on the credit agency. the reason lawrence is absolutely right, is that i think the downgrade is going to happen. i think the white house has now

realized the downgrade is likely to happen under any scenario. if that's the case, the conviction the president will veto anything that's not that bill is correct. they are going to get downgraded. if they are, why not veto everything except for that bill? that makes political sense, at this point. it didn't two months ago with the threat of the downgrade where you could have done something to avoid a downgrade. >> i disagree. i think this president is not a gambler. i think the last thing he wants to do is adjust the markets to see if they collapse 1,000 points, 2,000 points. >> i think you are right on that, joe. what lawrence said is so accurate that it's within filled with falsehoods on both sides. the obscenity is while the falsehoods are spilled out, the

market has dipped. people's 401(k)s are no longer worth what they were a month ago. they are average americans who depend and look to their 401(k)s for future planning. they are diminished. >> the reason the president can't take this risk -- >> it's like bluffing. buying a house and this is as low as i can go. i don't say it with negative judgment. it's what they do. >> it's negotiating. >> andrea, what's the common time line that you hear on the hill? when do you think we are going to get a deal? >> first, we have to go through more of this. today, four hours of debate according to the rules. then start the debate later this afternoon. once that is done, i think you are going to see movement probably monday, tuesday,

wednesday. i have jury duty next week, so -- >> i can't tell what's more exciting. >> does this end up in the laps, ultimately of harry reid and mitch mcconnell? are they the ones that are going to do the deal? >> and john boehner. boehner, reid partners. there are relationships that go back. reid and boehner built mutual respect through the process as they have seen the way the speaker tried to handle this group. lawrence was with me yesterday on the show when we had a freshman on. he said he's got a bill in to lower the debt ceiling. he wants to actually vote for lowering the debt ceiling.

take back some of the money we already spent. >> right. >> lawrence talk about the possibility of the debt ceiling increased and the freshmen continue to refuse to play ball, the president can win politically. >> i don't know about their individual districts. that's the thing. there's one player here who is playing to the entire american people and all the voters. john boehner has to appear reasonable to 150,000 people in a conservative district in ohio. mitch mcconnell has to appear reasonable to 900,000 people in kentucky where rand paul is considered it. all the polls indicate he is winning the perception that he

is the one that is reasonable. what he has won, which is more important right now with swing voters is he's showing he is reasonable and willing to compromise by saying i was willing to do these things that were difficult for my party. by the way, the big parenthesis is there's no indication to pass these things. i was ready to do this thing that he never gets tested on. that is scoring points in the middle. >> it doesn't matter whether "the new york times" writes it. "the new york times" doesn't get it? you are sounding like a conservative now. at the end of the day -- >> every day is real. >> you think this is a great exercise? >> the polling indicates it's going well. it's not a great exercise.

it's where we all look bad. the white house has tried to make sure their guy doesn't look as bad as the other guys. what the tea party and republicans have done, given a gift of being absurd. of course mix taxation into this. one party says no, no, we represent the 24% who say don't do that. the math is working well for the president. >> "the new york times," it's not that they don't know what the fake days are. the narrative shifted. a week ago, we had all kind of news stories saying yeah, the president looks reasonable. he's winning. the president on the sideline is not doing anything. there's going to be disaster or not. three months from now, the

public rendered a judgment. there's too much fluctuation. one of the worst outcomes would have been passing most of the so-called agreements. most were filled with political poison for the president. >> andrea, talk about the president's relationship with the democrats on the hill. >> it's exactly what i wanted to bring up. >> okay. >> in terms of the larger of the country as a whole, lawrence and all of you, john heilemann, you are correct that he is the reasonable one. presumably, if it's not a catastrophe, he comes out better. he's fractured his relationship with house and senate democrats. they saw he was saying he would cave in on the entitlements and the things they hold dear, the progressive caucus and letting them carry the ball, he did not

improve his relationship at all. there's less respect for the white house on the hill. >> we saw that disappointment yesterday on the hill, john. >> from the democrats. >> talking behind the scenes. >> there's no question. it goes back to the clinton presidency. you remember this, welfare reform in 1995. the caucus hated bill clinton as he was getting ready to run. he fractured his relationship with them, then he got reelected, rolled into a second term and plenty of time to repair those relations. no question he's done real damage. it's also no question it's not an unusual circumstance for a president about to run for re-election to have separation from the base. i's not surprising. >> when this exercise has been

completed, he's going to be viewed as he is now, i think, as quite a reasonable man. but, he's going to be president of the united states when this is over in a country at 9.2% unemployment. >> andrea mitchell, thank you so much. see you at 1:00 on "andrea mitchell reports." >> who are we going to see on the show? >> john, mike, chris. we have a good start. >> should we warn her? >> he's a powerful man. >> andrea is how i normally start my day. i get up at 12:59. i wake up, turn on the tv and find out what is happening in the world from andrea. this is six hours before my time. >> way too early. way too early. >> up next, congressman elijah

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♪ >> feel like you are being tested? >> it's a test. this is a big step, trying to get control over the deficit and the debt. i try to do it by the august 2nd deadline. it's my test. >> is it fair to say you have a bit of a rebellion on your hands? >> i have a bit of rebellion on my hands every day. comes with the territory. >> you are not worried? >> never let them see you sweat. >> i am disappointed. i care about john boehner. he's a decent person. he's in the corner. it makes the job more difficult. i hope the american people learn that we are able to work through this. we have to do it. >> welcome back to "morning

joe." joining us now in washington, we have democratic congressman from maryland and representative elijah cummings. good to see you, sir. >> good to see you all. >> i am looking at the interviews you have been doing. you see a lot in the deficit reduction talk. it doesn't put democrats in the mood for anything. you are unimpressed with the president. maybe the reality of this every day and he doesn't. do you still feel that way and how do you characterize where things stand now? >> i think lawrence was correct. i listened to his comments a few minutes ago. i think we are at a point where, clearly, the republicans have pushed and pushed. they are not giving much at all. now, we are -- i think we are going to end up in a stalemate. i anticipate the boehner bill

will get through the house after he pushed his folks kind of hard. then it will be dead on arrival once it gets to the senate. the senate will send something over then the president is going to have to step in. he's going to have to say, basically, look guys, there doesn't seem to be an agreement. let's sign this clean extension, which is what they are anticipating. i think we will resolve this matter. it's the way it should have been. >> manufactured drama? >> come on. mika, you have a situation where over the years ronald reagan had the debt extended 18 times, bush ten times without all this. again, we have issues we have to deal with.

i don't think there's one person in the house that does not believe that we have to reduce spending. no doubt about it. at the same time, we have a crisis facing us. the stock markets are going down as we speak. we have to address this. now, we have a situation where we have come so far that we have to act and we have to act quickly. probably the easiest and best thing to do is do what has been done over and over again without the controversy. >> lawrence o'donnell. >> is there any version of a proposed deficit reduction package that's been floated in this process that you could vote for? >> i think the gang of six or seven, how ever many, they are moving toward the proposal that i would like to see. lawrence, you know, the few trucks came out in a report this week showing that so many of americans have lost so much. i think we have to be very

careful with what we are doing because, you know, we are going to put more burden on them when they have already lost so much. i think that's a form for disaster. yeah. i think i don't want to see these entitlement cuts. i can understand some cuts and working with entitlements to come up with reasonable proposals. at the same time, i have people in my district, the only thing they have is medicare and social security. they don't have savings and pensions. yeah, i think we can come up with something. clyburn said the other day on this show, perhaps what we need to do is have a clean, debt extension bill. then we sit down with a commission to just look at medicare, social security and

medicaid then another one to look at these tax reforms, then come up with solutions. >> congressman what bothers me with this process and where we are now, i, for one, do not trust congress. i do not trust either body to write a detailed plan over a weekend without any hearings, without anybody knowing what is in it. you know what that bill would look like a couple weeks from now. >> it would be a mess. yeah, it would be a mess, lawrence. you are right. that's why, i think, the only thing for us to do now is do what you said. i'm hoping the president will step in and say what i just said. look, we have to get this done and get it done immediately. we have never failed to pay our bills. you know, every member of the congress, i'm sure, teaches kids you have to pay your bills. you have to do that. a lot of americans don't

understand. these are our bills we already have made. we are trying to pay what we owe. i'm hoping that cooler heads will come together and we will resolve this. i believe we will. >> mike barnicle? >> congressman, your district is close to the capital, where you are sitting right now. >> right. >> do you have any sense among your fellow members of congress how foolish they look to ordinary working americans? >> i have to tell you, lawrence. i see my constituents almost every day. i have gotten letters -- i got a letter yesterday from a guy worth a million plus. he said this is crazy. you have to deal with this. we cannot afford to cut up medicare, medicaid, mess with social security. you have to do something. the public gets tired of us. keep in mind, when you go into

politics, i have been in this game for 30 years. when you go into politics, it's the art of compromise. you have one side going back to what mika was asking me, one side saying i'm not going to move, it doesn't put the other side in a comfortable position to move. democrats have moved, moved. the president moved, moved. we can't get 5% movement to where we are. >> yeah. that's fair. i mean, that's where lawrence you were talking about, the battle of perception. >> the president has won the perception. congressman the president won as being the reasonable man. >> no doubt about it. >> in the earlier stages, he publicly came out and indicated he was willing to at least discuss and consider what he would consider adjustments, what we call cuts to medicare, medicaid. program that is are dear to

democrats like you and others. but he never actually agreed to any. what i'm wondering about is don't democrats in the house recognize ha the president was doing was, in effect, a negotiating tactic, in which at the end of the process, he was going to insert a taxation component he was going to insist on where, in effect it was going to be a deal breaker. the president got a lot of worry and flak from democrats because he simply talked about these adjustments to medicare and medicaid. he didn't come close, not any way close to making a legislative agreement on it. >> lawrence, i think you are going down the right track. democrats were worried that the president might do some of those things he was talking about with regard to cutting medicare, medicaid, you know, and social

security. very worried. when you have been in this a long time, you realize there's a process to all of this. i believe that in the end, you go through the process. now, i think all of us have gotten a wake-up call. we have to deal with it, like i said, like a heart surgeon doing the most difficult heart surgery so that people who are already hurting don't vp to hurt more. >> congressman cummings, thank you very much. more "morning joe" in a moment. >> announcer: this past year alone there's been a 67% spike in companies embracing the cloud-- big clouds, small ones, public, private, even hybrid. your data and apps must move easily and securely to reach many clouds, not just one.

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♪ welcome back to "morning joe." i's 36 past the hour. a live look of washington. >> a beautiful shot. >> a couple news stories for you. james murdock is poised to stay on as chairman of british broadcasting of bskyb. people say he is confident that shareholders will keep him in the top spot. speculation that murdock may be forced out in the wake of the phone hacking scandal and from the papers top editor and

lawyer, they are expected to appear before parliament this time about the mistaken testimony regarding an e-mail about a large payout to a reporter for a hacked phone record. it comes as reports surfaced that news corp. is posting job opportunities in eastern europe for the now 200 unemployed staffers. positions range from materials manager to a consultant for dow jones. >> interesting. i'm just an observer. we haven't figured out whether murdock lied before parliament. was he under oath? is that perjury? he did lie. i have a feeling he lied. he lied before parliament, it's no better than lying before congress. so, i mean -- yeah. he's confident he's going to get

reupped again. that's an interesting board. very confident. >> very, very confident. >> he's got confidence and confidence alone. >> they control 40% of the stock. it's a good thing to have. >> 100% of the board. >> all right. it's a shame we are out of time. >> no, we are not. obesity and healthy eating. >> seriously. every day. >> a new study finds that one -- >> mika's cultural revolution. how long do we have to go through this? >> seriously. >> if i lose 20 pounds, will you stop this? >> yeah. >> please. >> okay, you are on. game on. >> one in six customers took the time to read calorie counts.

in most cases, they disregarded it. those customers who paid closer attention to calories -- >> we went to the moon. we are not going to worry about 120 calories. >> we weighed less when we went to the moon. >> break in half if you and barnacle went there. >> it's amazing we can go to the north pole. >> supersize it. >> that's what i say, too. >> coming up next -- >> do you want fries with that? >> of course he does. we are going to talk with a director -- they are addictive. literally addictive. you would fall through the ice in the north poll. the film "whistleblower" is already getting oscar buzz. we'll be right back.

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trafficking girls and bringing them across the border. it's not just my pts. involved from military officers to diplomats. i thought i was only going after one guy. i had no idea what i would be handing over. >> go as quickly as you can.

>> are you sure you want to go ahead with this? you know, there's no going back after. >> yes, ma'am. >> hmm. that was a scene of academy winner from "the whistleblower" from actual events from an american police officer who takes a job working as a peace keeper in bosnibosnia. joining us now is the film's director, larissa kondracki and kathy bolkovac. thank you for joining us. looks like an incredible movie. she is incredible. it seems like it captures the

story perfectly. tell us about the movie, if you could. >> you know, it's sort of done as the traditional sort of '70s with all the president's men and more modern, even. it's really about, you know, a fascinating human being, this lady. >> right. >> we take it through insane circumstances. >> a former nebraska cop, right? >> yeah. lincoln, nebraska. >> from lincoln, nebraska to bosnia. >> how closely did you work together then i would like to get into kathy's story. >> we went over where kathy was living. we had a long conversation. we got a lot of details from her. once we decided to go forward,

we were in constant contact. kathy was in contact with us. it was a very close relationship. >> yeah. >> so your story, if you can encapsulate for us how you ended up there and what makes it a movie. what is the turning point that you think people need to know about. >> okay. in a nutshell, i was ready for a change in my life. i was approaching 40. i had been a cop and divorced twice. a mother of three. i needed extra money for my kids college education. it was $85,000 tax-free dollars. i left my kids home. my youngest was 15 at the time. my two oldest in college. it was a matter of me wanting to

grow a bit about international law. my grandfather was from croatia. it was a great learning experience for me. the opportunity came along with the government contractor. i accepted that position and soon into my employment learned it wasn't all it was cracked up to be. prior to going to bosnia, one of the gentlemen made a comment if you were to find nice 12 to 15-year-olds. i tried to bury it a bit. once i got to bosnia and doing the investigations, it was clear the brothels and bars and strip clubs were dressed up as girls, women and girls trafficked from eastern europe. my investigations began to be covered up, canned and i was demoted from my position. a few months later, terminated. >> who did that? who was responsible? >> the government contractor who

hired me. a state department contractor. >> right. >> i took them to a uk try bual. >> who were they trying to protect? >> themselves, mostly. they wanted to continue to get the government contracts for missions all over the world. it continues today. >> do you think they knew what was going on and wanted to turn a blind eye to it. >> absolutely. i wasn't the first person investigating their employees. a year prior, at least a year prior another gentleman came forward who was making, was actually suing them in the u.s. courts because the helicoptered video tapes, sex tapes. >> you believe and it's what the movie is about, but shocking to people watching this right now

that they knew about the trafficking of 12, 13, 14-year-old girls. >> more so, when you were approached at the elevator, you were told from the state department -- >> that's right. they claimed to be taking their orders from the state department and their fired me. >> what year are we talking about? >> this was 2001 when i was terminated. >> that's when kathy was terminated. if you follow the news right now, we have 5-year-old boys in afghanistan. this is, i think that particular chapter of life. it's still continuing to this day. it's why we screened the movie for the u.n. the u.n. correspond ens. we got a leaked memo that the secretary general is concerned about the film. they will not -- they are trying to do a damage control thing. >> no commenting, no

condemnation? >> no. we have internal memos saying it happened, but let's not make it public. we are trying to comment on this issue, not -- or the state department or whoever. this isn't something that happened way back when. it still continues and we can look at the laws of international immunity and this can be -- >> right. >> there's -- there are gray areas to things, but in my opinion i think you agree it's black and white, peacekeepers should not be buying and selling girls. >> we can all agree on that. >> you know. >> i'm trying to figure out what the bush state department incentive would be for covering it up? >> really? >> why? >> to be honest -- >> united nations. >> this hasn't been the bush and state department. this has been going on for decades. this has gone on across both the lines if you want to say that. but for me, it is more a matter

of everybody's in bed with each other and you have to, you know, be able to continue these wars and profit from them and that's what this is all about. >> i mean we're talking about billions and billions of dollars in contracts. a little sex trafficking scandal like this, that's a soft issue. those are soft politics. >> i think it's important also to add that there are some changes attempting to be made. senator patrick leahy has a bill that's been introduced, the civilian extoerl jurisdiction act which will make it possible if passed for the federal government, for the department of justice to start cracking down on this. >> thank you very much. >> thank you all so much. >> the whistle blower, opens in theaters next friday, august 5th. thanks again. >> thank you. >> in a few minutes, senator mark warren, grover norquist, among others. you're watching "morning joe."

joe." remember the play we showed yesterday, the play -- >> the bang-bang play. i couldn't tell. >> bang bang bang. >> bang bang bang. >> the pirates and braves two nights ago. 19th inning. >> tag, plate. what is it? safe or out? >> he's out by five feet but the umpire called him safe so he could go back to the hotel. jerry nooels who made the call. a horrific call to end the game.

put out a statement yesterday under a lot of heat. here's what he said -- defending his call. >> what does that mean? >> in spite of all the video evidence we have before us in this modern age. he said, the pant leg that was sort of billowing in the wind. >> all right. >> should have called jim joyce, and he would have admitted, i missed the call, i blew the call. >> they played again last night. jerry meals, early in the game, first inning, another try. let's see how he did. >> they need to cuff the guy -- >> does he have the triple or not? >> punches him out. looks like -- yeah, i think he made the right call. >> okay. >> complete redemption for jerry meals. >> complete. >> complete redemption. other stuff happened in the game, great throw from left, all eyes on the umps for another

close play at the plate. calls him out. i think he made the right call again. this one also went to extra innings. no controversy, though. the braves win the game and in the al east the yankees lost, we should point out and congratulate the seattle mariners, snapped their 17-game losing streak. >> yeah. >> mariners win, yankees lose. red sox got a win, back up three games. >> john lackey, cy lackey. lackey doing batting practice and he still gets a win. >> look at this. >> by the way, joe, this guy, drives up to boston to watch these games like three hours. >> joe, three hours, drives back and forth. >> we have to have him on. specialists, lots of doctors, lots of advice... and my hands were full. i couldn't sort through it all. with unitedhealthcare, it's different. we have access to great specialists, and our pediatrician gets all the information. everyone works as a team. and i only need to talk to one person about her care.

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nobody believes that the boehner problem is anything more than a big wet kiss to the right wing. and i mean, the tea party. that's who i mean. it's too bad his caucus is being run by such a small number of people. >> what about the president's plan? well when asked, the president's plan his aides point to his speech and a veto threat. with all due respect, congress can't vote on a speech. and a veto threat won't prevent default. >> we are urging the republicans now to step back, put their party caucuses aside, put their pledges to grover norquist aside, put their caucus pledges to one congressman or the other aside, and put this country first. >> it's unfair of the president of the united states to lead from behind. it's unfair of the president of the united states not to come

forward with a specific plan that, perhaps, could be considered by both bodies but only to go out and give lectures. >> we are not going to hold this country hostage to the tea party. that's where it's at. you know, those folks over there, about 80, maybe even more of those republicans, they pledge to grover norquist. i want to pledge allegiance to the united states of america. >> welcome back to "morning joe." yes, you do. it's 8:00 on the east coast. we're going to delve even deeper into the debt discussion. >> really? all we've been talking about for four weeks. >> beyond the debt ceiling bedate what will it take to fix the country's problems from entitlement reform to tax increases and spending cuts what are the tough choices that need to be made and how can they happen in this climate. >> mike barnicle -- >> people talk over each other. >> to mike barnicle real quick.

you had to love yesterday john mccain, going after the president for showing no leadership, he starts talking about hobbits and middle earth when talking about the republican freshmen. this was john of mccain of old, back swinging at both sides. >> when we played that clip earlier all i could think of is welcome back senator mccain. this is senator mccain we're familiar with from several years ago taking on both sides, acting very independently, the maverick has returned. >> he's returned. why don't we talk about who's around the table. >> it's funny, i was just going to do that. with us in new york the president of americans for tax reform grover norquist. your name is becoming a verb and a noun and a concept and we'll ask you about that. former u.s. comp controller general and head of the government accountability office david walker back with us, founder and ceo of the comeback america initiative. we also have with us for this conversation the host of msnbc's "the last word" lawrence

o'donnell and msnbc contributor mike barnicle and on capitol hill, democratic senator from virginia and member of the senate budget committee and the so-called gang of six, senator mark warner. >> why do we include limb? >> i think he has -- >> seriously. >> really important things to say. >> as long as he's not talking about food. senator where are we? how close are we to a deal? >> i think we're still going through a little bit of that dance. we're going to see if the boehner plan gets out of the house. if it gets to the house it's going to get voted down in the senate. then the senate will take up harry reid's plan, which gives us a little bit more breathing room. and, you know, the question we have, i look around town, and the only comprehensive bipartisan plan that makes the kind of hard choices everybody talks about from tax reform to entitlement reform to spending cuts that gets us close to 4 tlts is the so-called gang of six. democrats and republicans alike, it may not be perfect this is the only bipartisan plan out there. this ought to be in the process. if there's going to be a new

commission this plan ought to get a vote as well. >> i would guess david walker and i would love that. i don't know about anybody else around the table. that's not going to happen, senator, is it? >> right. >> what we're going to do is kind of limp through this august 2nd deadline. i don't believe we're going to default. but we're really, that's only the first step. the rating agencies have said if we don't get something close to $4 trillion, if we don't say, all right, both sides, democrats you have to put entitlement reform in the mix, republicans, tax reform in the mix, we have to do spending cuts on domestic and defense, if we don't take the work we built upon the simpson bowles commission and come december, this plan ought to get a vote as well as this commission, the chances are this new commission that may be created, chances are we'll end up in deadlock, if we don't have this chance where will we be six months from now. >> that's a good question. where will we be six months from now. a short-term deal has more uncertainty. >> senator warren, your governor has come to an understanding of

what the debt ceiling is. earlier in the year he was saying hey, don't worry about it, you don't have to raise it. now he realizes it would hurt have virginia badly if we went into default. virginia would go into default pretty much immediately thereaft thereafter. >> our aaa, as a matter of fact when i was governor i had a two to one republican majority, even though grover didn't like this, we actually forged a plan that raised revenues, cut spending, support of a third of our republican house, half of our republican senate and what happened when we did that we got named the best managed state in the country, kept our aaa bond rating and best state in the country for business. putting a reasonable plan in place, getting your balance sheet in order is something i think most businesses would agree ought to be our top priority. >> dave walker. >> thank you for all the work you've done in conjunction with the g6. i prefer that rather than gang of 6. the key is this, realistically you're not going to be able to

make all the tough choices with regard to budget controls, tax reforms, defense cuts, social security, medicare, when realistically is that going to be able to happen? after the 2012 election? what are your thoughts on that. >> none of this gets any easier after the 2012 election. we keep clicking on $4 billion a day to our national debt every day we punt. if out of this august 2nd, you know, debate is going to come a new commission that's going to report back at the end of the year, that all we're saying with only again bipartisan group in washington at this point that really addresses the problem, when that commission reports let us have a vote as well on this plan, this building upon the simpson/bowles plan, so-called g 6, whatever else you want to call it, hopefully a gang of 50 at that point or 60, in the senate, and let us have an up and down vote on that. if we don't get the votes so be it. at least the american people will see a real choice that puts

the real problems and some real solutions out there. >> grover, a question for the senator? >> senator, back in january, the gang of six said that their job was to put in legislative form. >> right. >> the obama deficit debt commission report. >> right. >> it's been six months. there is nothing written down in legislative language. the house is about it to vote on the boehner plan. it's actually written down in legislative language, voting on something. i got faxed to me a series of outlines and essays and frameworks and three pages that didn't add up to anything and i was told that's the gang of six plan. when can the american people see the gang of six plan, written down, in legislative language so it can be scored and so people can know what you're talking about? it has a bunch of ranges in here and then you kick it over to harry reid's appointed senate finance committee to make the final decision. >> i don't know if you've read it, what we do -- >> yes. >> we have to allow a bypass if the committees don't work, a equal number of republicans and

democrats -- >> is this in legislative form? >> we have about 80% in legislative form. >> can we see it? >> let me assure you by the time there's a vote on a real plan, if this commission reports great, if they're not going to come out, if this commission ends up being deadlocked or both sides put on the regular suspects there ought to be an alternative that deals with tax reform, entitlement reform and the kind of spending cuts that get us close to the $4 trillion that most economists left and right will say is what we need to do to move that debt to gdp ratio in the right direction. >> senator, for seven months, you haven't written it down in legislative form. we have a stack of papers saying all work and no play makes jack a dull boy. we don't have a piece of legislation written. >> grover -- >> done this for seven months. >> i haven't seen a hatchet in his hand. he's not nicholson in the "shining." >> let's touch on one thing you mentioned, if the senate doesn't do their job, this commission

actually has a panel i guess of six, three republicans, three democrats, and then they go at it. >> that's what both the boehner plan and my concern with the boehner plan is, not because of the politics around it, but the rating agencies have said you do a short-term extension you're going get a debt downgrade. that is the equivalent of tax increase for every american across the country. a new commission, i hope they do great work. i can tell you this much, it takes a long time for people of different ideological views, tom coburn and dick durbin hours in a room to put in the enforcement mechanisms and cuts you need. we have something out there, a third of the senate that signed on. show me anything else in this town at least that's even close. >> mike barnicle. >> senator, let me ask you a question. most people i encounter during the course of an ordinary day think the work of the senate, work of the house with regard to this is preposterous. they can't think of another business they're involved with

or deal with that would let everything go right to the deadline -- >> amen. >> the way happening now. i want to ask you, what are the odds that someone who's going to come into the room today, tomorrow, your room, the house side and say hey, you know what, let's do something for the country? >> well, let me tell you, i think there's a whole lot of us that want to do that. i've been as frustrated i can assure you, felt like i was the crazy man over the last couple months walking around with a sign saying, the end is near. frankly i don't get laughed at as much because i've been saying we have to do that. in our plan and any other plan, your anot going to rewrite the tax code in a major way in a two-week period. we knew there had to be a process set up that would actually allow the changes. we have put that in place. and as much as grover and some of the naysayers want to say otherwise, we've got most of the legislative language in place, 36 senators, equal number of democrats and republicans, hit about that $4 trillion mark in terms of deficit reduction, put it out there. we've gotten arrows from the

left and right but if this debate continues to be driven by the extremes whether we go off the cliff august 2nd or end of the year we're going to be at the same place. we have to find some way to get together. >> senator dave walker, final question. before we get there, any way americans can see the 80% of the language down there so we can look at the details? >> we've got that laid out. a lot are budget target cuts what we lay out are enforcement mechanisms in terms of spending caps. what we say is we do give, you know, we do say there's not going to be an independent group alone going to solve this. you have to involve the various committees. if the committees don't do their job there's a bypass mechanism for an equal number of republicans and democrats to put together -- >> dave walker. >> senator, you've done good work. it needs to be in writing sooner rather than later. here's my concern. no matter what you do with regard to committees and how good of work the g6 does another group that has on this that doesn't get talked about, it's called american people. all of the work that's been done

so far with regard to simpson/bowles and your good work on g6 inside the beltway. we desperately need a fact-based, nonpartisan, nonideological discussion and debate. that's got to happen after this debt ceiling limit and frankly i hope that you will encourage the president and other congressional leaders to come together on that. because tough choices will have to be made. and the american people need to understand it. and they need to buy into it for it to happen. >> you're absolutely right. in a perfect world and that's probably not washington but sure as heck what i would like to see, we ought to have pairs of senators and house members and let me assure you both democratic and republican house members as well, that like what we're doing. we ought to be out across the country in a bipartisan form the way saxby chambliss and i have done in a couple locations and take people through the kind of same facts that you have already and say here are our choices. if there's a better way to do it we'll have at it. don't give me the extreme

positions that walls off completely revenues or walls off entirely entitlements. you can't get to the numbers we need if you draw those kind of lines. >> senator mark warner, thank you very much. >> thank you. >> thank you, senator. always great talking to you. >> thanks, guys. >> so i just want to touch on a point that you asked, i'm not going to ask lawrence because he's so cynical, this is how it always happens. >> realistic. >> calls it realistic. >> practical. >> 1993 republican's raised hell over hillary's health care commission over closed doors, democrats same thing with dick cheney's energy commission in 2001, 2002. the stakes are so high and we got to guess whether barack obama's really serious about entitlement reform or not and what was their proposal if there was one. if the republicans really were going to come with $800 billion of revenue enhancements. i had to turn on lawrence to see

it is true the president had an $8 billion deal and then he asked for 50% more. i mean it's insane that all of this is happening behind closed doors and we've got to read tea leaves and try to figure out whether our economic system is going over the cliff or not. >> we know why. go ahead. >> there's two big problems. one, it has to be in writing. okay. and secondly, you have to engage the american people. if you don't engage the american people, it's not going to be successful or sustainable. >> you know what would happen if the democrats released everything, they say they have it laid out. can you imagine? >> we've got -- >> the republicans run it down. >> republican house run it down. >> imagine and they're giving on entitlements and giving on all these things. >> they're not giving on anything. >> really? >> somebody tells you they have a plan and not written down it's lying. that's how you tell a politician is lying. >> tell me what would happen, turn the tables. >> i can tell you. what would happen to democrats

if they put out their entitlement plan is what happened to republicans when they put out their entitlement plan, you would have dumbed down 30-second commercials attacking anybody that had the courage to support entitlement reform. >> the president's put out $650 billion in cuts to medicare, medicaid and social security and no one cared. >> during this process? >> thank you. >> yeah. two weeks ago. >> it's on a website somewhere? website somewhere we can read it? >> he came out and announced that is what his deal was with boehner, he was there. >> i want to see it in writing. >> what you're right about is, that he did not specify the medicare cuts. now, now, let's remember something about medicare cuts. they have been done many times by congress before and they have never been specified. i did medicare cuts in 1993 sitting with senate finance committee staff alone, i can tell you we did $200 billion of it, i can tell you right now there wasn't a single member of congress and there wasn't a single member of the press who

had any idea what all of those were. there were a couple of senators who cared about a couple of items, but there were dozens and dozens and dozens of these cuts, no one knew what they were. medicare is normally cut. >> we are in a deep hole. we're spending $4 billion a day more than we have in revenue. $2 billion a week short of mandatory spending. we've got to quit talking about this stuff in very generic terms. we need to get specific. the comeback american initiative i head put out a report restoring fiscal sanity that gets specific with regard to social security, with regard to medicare, health care, defense, taxes. that's what has to happen. >> lawrence, are you just saying it doesn't happen in congress because -- >> of course that's what happens eventually. you get to a point in the process where it is eventually very clear, the process we've had this year has been ridiculous, hasn't been a single hearing. >> why haven't the democrats put out a budget? >> no weighs and means committee. >> why haven't the democrats put out a budget? >> i told you, remember, months ago you said to me, hey, the

ryan plan has come out. now obama has to come up with a plan. i said no, he doesn't. he doesn't have to come up with anything. these republicans are killing themselves with these crazy plans. >> why don't the senators run by the democrats, harry reid. why have not not done a budget? >> because. >> 900 days now. >> a crazy body over there in the house of representatives who, whatever harry reid brings up, is hopeless in the house of representatives. he knows it. he's not going to waste his time. >> same thing about the senate but they put out a budget. >> no they don't, globe grover. >> i wouldn't mind if the democrats pass things they couldn't pass. put their fingerprints on something. >> as long as the republicans are putting their fingers on stuff. >> let's don't talk about democrat and republican. how about the constitution of the united states. >> oh, please. come on. >> that's the problem. >> the constitution says that there's only one thing the congress is supposed to do every

year, budgets. a budget that's all they got to do. i don't care about democrats and republicans. we're in a situation where special interest pledges whether on the left or right. >> careful. >> equal opportunity. >> the originator of the pledge. >> it's a problem on both sides. ultimately we're going to have to -- >> tell me what legal pledges are liberals to sign in the congress? >> guys. >> progressive. >> we're going to go to break, split this up. we've talked about entitlements and why we don't have entitlement plans. when we come back, lawrence o'donnell, we're coming back, lawrence o'donnell is going to be talking to grover norquist and i'm putting on my helmet. >> for many years. >> you guys are honored guests on my show. >> we shall return talking about grover's tax pledge and if it really is going to cause locust to -- [ female announcer ] what if your natural beauty could be flawless too?

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the speaker's plan is on life support and it's time for him to pull the plug. we need to move on to other plans that actually have a chance of passing. >> it is not a solution and it will not pass. every democratic senator will vote against it. i don't know how many more times we need to say that, but it's true. >> the white house issued a statement of administration policy which said that when the legislation speaker boehner is now revising reaches the president's desk, unnamed senior advisers will recommend that the president veto it. i have a very for those senior advis advisers. what about this legislation is so offensive you would rather see the nation default on its obligations than have the president sign it into law?

>> welcome back to "morning joe." that is a very good question for mitch mcconnell. grover before we open up the debate on your pledge. >> hour. you made headlines last week and talked about the need to pass a debt ceiling increase. you believe it would be very bad for america, for us to default on our debt, right? >> sure. some people have said default, who cares or it would strengthen the negotiating position of guys who want to spend less. i think it's a mistake to go into default. >> why is that? >> because you're going into a big question mark and you hand the executive branch tremendous amounts of power to decide what to spend and not to spend and i think that's not a good idea. better to have real spending restraint, not raise taxes and even harry reid has agreed they're not going to try to raise taxes. republicans are -- tax increases are off the table. the success of the last several years. and now we're going to have a debate about how much you should cut spending, a lot or little, republicans would like a fair amount, i would like a lot more than that, democrats want a little.

>> let's go to lawrence o'donnell. >> you would sign my pledge to always vote to raise the debt ceiling? >> probably not. i'm not running for anything. >> if you were a congressman you're saying, you would never not enable them to raise the debt ceiling? you would never stand in the way of actually raising the debt ceiling? when it was necessary. >> there might be times when you would say, no, but in the past -- a. >> you said we shouldn't have a default. doesn't that mean -- you're saying there are situations which you would think default would be okay? >> the answer is it's possible. >> really? >> and we wouldn't say no. however my argument is, where you're getting into the pledge i share with elected officials, commitment not to raise taxes because we are overtaxed and we overspend. the problem we have is we spend too much. the only solution to spending too much is to spend less. raising taxes is what politicians do instead of reforming government. so we've said take that off the

table, focus on the reforming government, and cutting spending and not raise taxes. and the good news is, taxpayers are winning on that issue. now we have to win on spending. >> i want to read you one tweet. @lawrence. >> bring in tweets to the table now. lawrence please give norquist a hard punch to the mouth to me followed by hard kicks to the shin. i can't watch -- >> that's why i'm here. >> joe put me over here. >> i am between. >> grover has been on my show, i've known him for years. >> mika, you have been blaming his tax pledge for earthquakes and natural disasters as well. >> i think it's, you know, not his fault that people signed it and are now holding on to the point. hold on. >> invented it 25 years ago. holding on to the point, but let's talk about the pledge. does it -- because there was back and forth with the newspapers, the bush tax cuts, rolling them back or in some way, would that really be a

violation of the pledge? >> look, anything that raises taxes $4 trillion over the next ten years would be a tax increase, doesn't pass the laugh test, and make it clear i thought i was being clear at the time, evidently not, there are a couple boxes we keep tax cuts we keep extending. the r and d tax credit, so politicians can extort campaign contributions from business, that's policy, having a tax credit. to stop that would be a tax increase. the amt patch is something that the democratic senators like to sort of doll out every two years to bring people back to appreciate how wonderful they are, not to take them out of their houses, the '01/'03 bush tax cuts have been extended under republican senate, democratic senate. it's a tax increase. it doesn't pass the laugh test to call it something other than the significant tax increase. >> pledges are a problem, period. because they bind us.

they say -- >> hold on. >> only one pledge. let's not pretend any liberal signs any pledge to anyone when they take office. there's one pledge, grover's, signed by right wingers and republicans. it's signed. >> if people take a public pledge, they are basically saying i will never, i will never -- >> equal pledge going on here. >> i will never raise taxes, i will never cut social security, i will never cut medicare, that's going to drive us off a cliff. look, if you look at grover's pledge, carefully and you look at the exact letters of the exact language, it says i won't raise marginal tax rates, and i won't eliminate deductions or -- >> no tax increases. >> increase revenue of any kind. >> it's the dumbest pledge you could put in front of anyone! >> that doesn't mean you can't engage in comprehensive tax reform. >> yes, it does!

stop! >> and generate more revenue. >> crazy talk! >> don't come in here and say they shouldn't have pledges and then defend the craziest pledge submitted to anybody. >> i don't believe pledges period. but if you read the language -- >> i've read it. you don't seem to get it. it says you can't touch anything. increases revenue in any way. >> raises taxes. >> one second. >> i can't close a tax loophole because of grover. >> 1986, tax reform, which i was working on when we designed the pledge, with reagan support and encouragement and endorsement, thank you, it was take the rates down broaden the base leads to more economic growth and revenue. i'm in favor of more taxpayers not higher taxes. because we have more taxpayers and stronger economy, unfortunately the side effect the government gets more money but that doesn't violate the pledge. >> what do you think is the most egregious tax loophole in the tax code code? what do you think is the most egregious tax loop. >> permanent exclusion for income and payroll tax for

employer provided health care. >> what his pledge says is you cannot touch it. >> sure you can. >> no. wrong! it says you can as part of comprehensive tax reform. >> it says -- >> let me be specific. >> you cannot eliminate them. that's what the pledge says. >> let him talk. >> comeback initiative america put out last week engages in comprehensive tax reform, broadens the base, reduces rates, follows the current law path of revenue, which takes us beyond 18 percentage gdp. >> i don't know why we're listening to this. >> caps it at 21.5, rather than where we're headed otherwise, 23.3. >> give grover credit he has locked down all policy decisions a great job of doing this. he owns a party. i declared him -- >> lawrence, come on. >> the most powerful man in republican politics earlier this year. it's true! >> this is great theater for you. >> nothing is great theater. >> you act shocked and stunned and saddened your own words in the past have betrayed your

position. >> let's play them. what are they? >> you understand as you understood when out at the reg began library the reason grover's pledge works why the republicans are able to control the debate the way they are. the democrats love to talk about raising the bush tax cuts, the bush tax rates were the worst thing ever. democrats talk about tax fairness but at the end of the day, when it comes to raising taxes, they are cowards. they don't raise taxes when they had a chance to get rid of the bush tax cuts they blamed -- >> are you kidding me? grover, tax increases in the health care bill. 15. 15 tax increases in the health care bill. >> we found 20. 15, 20. >> in a significant way, you know democrats always blame. >> tax increases in history, i did it, grover was there 1993 if you're going to do a tax increase i only got to do one, biggest one in history -- >> and brought the recovery brought the republicans in the house and senate who changed the direction of the country and we have six years of growth.

>> so the bottom line is, we're going to two years from now another chance to get rid of the bush tax cuts which barack obama has been campaigning against for decades. >> which solves everything. you want to solve this whole crisis do nothing. have all those rate goss back to clinton. solves the problem. >> why didn't the president do that in december. >> because it's -- you're -- it would take a political kourj courage not available at the moment because of re-election. that's what second term presidents are for, joe. >> tax increase that large doesn't pay for the government. >> of course not. >> it would be -- >> it wasn't bad in the -- >> it would have been bad to get rid of the bush tax cuts. >> in the recession, two years from now, great. >> i want to ask if we understand the politics, and you certainly followed me when i was in congress. >> hey joe, did you sign his pledge? >> of course i did. >> of course you did. why did you think about something when sign a pledge? >> i hate tax increases. i never voted for any tax

increases. but you know what, 2011 is different from 1995. in 1995 we can go after discretionary spending, domestic spending and we could move toward a balanced budget. today, we're going to have to go after medicare, social security, medicaid, we have to slow down the rate of growth, do the things that dave walker and pete peterson and others have been talking about for years, and i understand that i'm going to have to support? things i don't like. do i want to raise tax rates? i don't want to raise tax rates but i have no problem closing loopholes to make sure warren buffett's secretary doesn't pay more higher tax rates than warren buffett or make sure the top corporations of america don't pay a 0% tax rate. if i said like tom coburn give me $3 trillion in cuts, and i will swallow, i will gag on the trillion dollars in tax loopholes that we close if it makes the tax system more fair and increase i will take a three

to one any day of the week because i know in washington, d.c., if you can get $3 cut for every 1 in tax revenue from closing tax loopholes you have won. >> done something. >> let me ask you, would you say to me, go into my district and say joe scarborough supports higher taxes? >> yes he would! >> i don't think so. >> i would say look let's look ronald reagan was offered that deal in 1982. and the tax increases were real and we're still living with them and the spending cuts not only didn't happen but spending increased more rapidly after that deal than before. then only eight years later they went to bush. he was a cheaper date. got $2 of imaginary spending cuts for $1 of real tax increase and the tax increases were real, still living with them. >> by the way, grover, i understand that. i understand -- >> let me ask you a question. >> let me talk for a second. okay. so we understand this, as conservatives we understand that

when congress talks about cutting things they never mean it. they never do. but let's say we can get dave walker in the room, to make sure that the spending cuts were real. would you not say, that as a small government conservative, as i've been, as you know, since 1994, if i were assured i would get three real dollars enforceable dollars of spending cuts for every $1 i raise, not marginal rates, but by closing tax loopholes, makes warren buffett pays the same tax rate his secretary pays would you say joe scarborough is no longer a small government conservative? >> we would say tell you what, take the $3 trillion in spending cuts do that and let's set the tax increases you're talking about off and do that as tax reform. every time you eliminate a deduction or credit not only get in the way of spending restraint they spend that money rather than cut spending but you also up and tax reform. when we get to tax reform if we took the approach that you are talking about and that coburn

wants they go let's do tax reform and the democrats would love to trade you deductions and credits. >> you do know -- >> joe he said you would betray the pledge. >> i guarantee he wouldn't come in my district and campaign against me. you know tom coburn, tom said tough things about you, i'm sure you haven't taken it personally, since 1994, tom coburn has been one of the toughest deficit hawks washington's had. a blessing to the conservative cause. >> he's very good on a lot of the spending issues, yes. >> right. okay. >> and he got over 30 republican senators to violate their pledge to you. >> luckily he failed at that. >> in violation of your pledge. >> dave walker. >> specific enforceable spending reductions, got to get specific. >> how do you do that? because grover is right, you never get real cuts. >> the same way you make unicorns. >> you can change existing law with regard to entitlement

programs, mandatory spending, you can apply, you know, you can end up getting a lot more of the budget into the discretionary side with forcible caps but we must have comprehensive tax reform that will make it simpler, fair, more equitable, competitive. >> let me tell you what the -- >> well and through simple -- >> let me tell you what impresses me when it comes to phantom spending cuts. you don't have to look at the democratic party for this. john boehner comes out, john boehner, i respect, i worked with, i like him very much, john boehner comes out this spring and says, we're going to save $38 billion and that's the only reason we're reopening the federal government. we find out a month later that instead of $38 billion saved for taxpayers it was $300 million. and then we find out a month later, cbo scores and says, actually, this isn't going to save us $38 billion. it's going to cost us $7 billion. more a year. this is -- listen, if this were just democrats doing it, we

wouldn't have run newt gingrich out of town in 1998. washington can't cut spending. why? >> we have cut spending. we did it in. we did $250 billion in spending cuts. >> did you really? >> yeah. and what's true about it is. >> real spending cuts? >> yes. what's -- absolutely. >> the spending -- >> in real dollars went for something. we enacted -- >> a lie on the table. >> lie on the table. we have done spending cuts many times. you want to pretend every spending cut is a lie. that's not true. we did $250 billion. now what is true, is later, we amended about $20 billion of that. 90% of the cuts were executed. that's how we got to washington. that's how we got to a surplus. >> we all know -- >> we raised taxes and we cut spending. >> keep yelling if it makes you feel better. >> what do you think the surplus came from? a magic act? >> yeah. >> i think that was fake. there wasn't a surplus.

>> the surplus -- >> we got to -- >> first of all i'm going to get to a point i was going to make. >> gingrich -- >> clinton did too. >> the bottom line is washington, d.c., always talks about spending cuts as the slow down in the rate of explosive growth. were there ever real spending cuts in medicare, no there weren't. that's a lie. >> you know -- >> that's silly talk. >> it's not a lie. >> it's beneath you, joe. >> you know what, history proves it out. go on google and look at numbers. it is simple math. >> part of the problem is, washington uses words that don't mean the same thing as webster's dictionary. a cut is an absolute reduction from the status quo. all right. there have been some. but most of the things that people talk about in washington are a reduction in the rate of increase. that is a spending reduction. a legitimate. but a cut is an absolute reduction. they've had happened but they're rare. >> happened in 1995 when bob livingston had about $50 billion in recessions, other than that,

it's nonsense. >> joe, if you want to reduce the total amount of medicare spending or reduce the total amount of social security spending over time, there's only one way to do it, declare people ineligible to join. the reason the global amount of medicare spending will always go up is more people will go into it and medicine becomes more expensive. same thing, there will be more ben fish arearies. we have reduced the rate of growth of the payments and the reimbursements in the medicare sector and the social security recipients many times over time. both of those things would be guy gantically bigger if we haven't made cuts in the past. >> only major industrialized nation in the world that doesn't have a budget for what we spend on health care. way overpromised with regard to health care and we subsidized middle and upper income individuals who voluntarily sign up for medicare part b and d. it is a disaster and we need to make dramatic transformation reforms that will achieve some

level of care that's appropriate affordable and sustainable. >> only in washington, d.c., are spending increases called cuts. >> why would you raise taxes to continue the problem you point out. >> lawrence -- >> grover -- >> primary joe if he did that thing. >> dave walker -- >> there you have it. >> dave walker co-founder of no labels and grover norquist president for americans for tax reform. lawrence o'donnell. >> we can't wait to see the last word with you lawrence. >> business before the bell is next. [ barks ] ♪ [ cat meows ] ♪ [ whistles ] ♪ [ cat meows ] ♪ [ ting! ] [ male announcer ] travelers can help you protect the things you care about and save money with multi-policy discounts.

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45 past the hour. >> i'm tired. >> yeah. >> david walker is great, isn't he? >> david walker makes a lot of sense. >> he does. >> makes a lot of sense. >> business before the bell with simon live at the new york stock exchange. >> good morning to you. we have a hopeful sign on the economy today. new claims for unemployment benefit last week fell below 400,000 for the first time in four months. 398. that's a glimmer of hope. the real focus here at the height of earnings season is still on the deficit talks. i just want to make a important distinction. this could be important over the next few days between a default where the u.s. doesn't pay its bills and look like the politicians are striving to avoid that and a downgrade from

the ratings agencies. it may still be that they don't default, do a deal, but that s&p or moody's downgrade u.s. debt because they haven't sufficiently bent the curve down on the future ratios. we lose potentially that aaa status down to aa. just watch for that over the coming days. >> simon hobbs thank you very much. up next an emotional good-bye to a place that's been healing america's wounded since world war i. we'll be right back. is is is

welcome back to "morning joe"p. >> oh, boy. >> how are you doing today? >> i'm all right. how are you? >> i'm doing okay. >> what's wrong? >> it's just, it's okay. i'm good. >> are you doing okay? >> yep. >> you okay, mike? >> i'm fine. >> okay. good. talk to joe. >> he loves america. >> go ahead.

>> okay. the u.s. army's chief medical facility is closing its doors. walter reed retired its ceremonial flags yesterday after more than a century of treating wounded american fighters and presidents. nbc news chief pentagon correspondent jim miklaszewski looked at the place that helped heal so many and suffered its share of scandal. >> for more than 100 years, walter reed has been on the front lines of military medicine, caring for americans wounded in war. colonel kutz is the commander at walter reed. >> this has been such an important place of healing for all of them. >> reporter: it's also an invaluable piece of american history. >> we're entering the sitting room of the suite. >> reporter: world war general blackjack pershing lived and died at walter reed. dr. pierce says other flocked here for his military advice. >> and two-star general patton came here to this room, got down on his knees on this rug. >> right here. >> right here. and general pershing blessed him

before he went off to war. >> reporter: president dwight eisenhower died here in 1969. and for decades, every commander in chief has been drawn to walter reed at times of war. over the past ten years, 18,000 americans wounded in iraq and afghanistan have been treated here. critical care nurse rosemary is inspired by their spirit and determination. >> young soldiers who all they want to do is get better to get back to their troops. >> reporter: but in 2007 a scandal broke over poor housing conditions for outpatients, which ultimately led to improved care military wide. and where do the wounded go now? the more seriously injured will be moved to a new high-tech rehab center bethesda naval hospital. what happens to walter reed? the 113 acres here is prime real estate. the city of washington gets most of it for commercial development and housing. even a center for the homeless. but colonel kutz is confident

the legacy of walter reed will live on. >> once you've been at walter reed you can't get walter reed out of you. it's a part of your spirit terrific forever. specialists, lots of doctors, lots of advice... and my hands were full. i couldn't sort through it all. with unitedhealthcare, it's different. we have access to great specialists, and our pediatrician gets all the information. everyone works as a team. and i only need to talk to one person about her care. we're more than 78,000 people looking out for 70 million americans. that's health in numbers. unitedhealthcare.

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welcome back to "morning joe." time to talk about what we learned today. mika, what did you learn? >> no coffee for lawrence. he is the joe wilson of our show. >> the joe wilson. lawrence the joe wilson of our show. that's a good point. you know what he said, i'm going to have a lot of caffeine before grover comes on. >> i'm not letting him have any more. >> a man of his word. what did you learn, mike? >> i learned after listening to that contentious debate that we actually might be on the verge of having an ungovernable nation.